Powell stated that "tariffs are not the main cause of inflation" and emphasized that politics does not influence, The Federal Reserve (FED) spokesperson: may further cut interest rates.

With a cautious signal following the September rate cut, with emphasis on tariffs and weak employment leaving policy nowhere to go, markets are trying to interpret the Fed's next move. (Executive Summary: Fed President Powell delivered a "Economic Outlook and Framework Review" speech tonight, what is the Fed's next step after the September rate cut? (Background added: Powell warns of overvalued market "U.S. stocks flipped", Fed sounding tube: keep the door open for interest rate cuts (highlights of speech)) Investors are eyeing Washington, D.C., and Federal Reserve Chairman Jerome Powell gave a September 23 speech explaining why he lowered the target range for the federal funds rate to 4.00–4.25% and once again reminded that "there is no risk-free path for monetary policy." The remarks were seen as a signal that policy was neutral but still slightly tighter, and it also cast a difficult interpretation for financial markets. After a 25 basis point rate cut: neutral or tight? The rate cut is the Fed's first move this year, and the official reason is not across-the-board easing, but risk management. Bauer noted that current interest rates "still have modest constraints" on the economy, meaning that if the labor market deteriorates significantly, it could still fall again before the end of the year. The Wall Street Journal reported on the 23rd that Nick Timiraos, a reporter known as the "Fed sounding board", interpreted that policymakers want to retain room for maneuver, because inflation has not completely subsided, but employment has slowed. Bauer's message to the outside world is that the road map exists, but the steering wheel is controlled by the data to be released. "There is no risk-free path to monetary policy." The Fed's latest economic forecast summary (SEP) suggests that there could be two more gradual rate cuts totaling 50 basis points in 2025. However, Power stressed that this is only the current best estimate, not a promise. Tariff: one-time shock or long-term pain? On inflation, tariffs are like a sudden crosswind. Bauer said import taxes pushed up core PCE to 2.9 percent, mainly because costs were passed on to consumers. The price hike observed so far is biased towards "one-off" rather than penetrating the entire supply chain, but disruptions still add to the policy difficulties. If the trade friction prolongs, retailers and importers will have less room to absorb costs, and inflation may be ignited again, forcing the Fed to stretch its restrictive stance. At the same time, tariffs have also rearranged the industry, and companies are considering moving some production back to North America to strengthen supply chain resilience. Whether this structural shift will lock inflation pressures at higher levels is the next point of observation. Tariffs are not a significant factor driving up inflation, and most forecasts assume that their pass-through effects will end until the end of next year. Dual Responsibilities and Political Independence The Fed's statutory mandate is to maximize employment and stabilize prices, which are often tug-of-war. Powell reminded that if interest rates are cut excessively, inflation may stop at 3%; If it remains tight for too long, employment may be hit unnecessarily. The slowdown in job creation over the summer has made the board more focused on labor market performance. In the face of political noise in an election year, Power categorically responded to external doubts: "Decisions are never based on political factors." His remarks contrasted with some officials who advocated "rapid decline, big reduction", highlighting different internal views on the weight of risk. We never take politics into account. Many people don't believe us, many people say that we are politically motivated, which is pure nonsense, and our decisions will never be based on political factors. Looking ahead: the next step and the market's way of dealing with itself Bauer said that before the next meeting, employment, growth and price indicators should be reviewed before deciding whether to adjust policy. He expressed confidence that long-term inflation expectations remain at 2%, while noting that income growth is closely linked to productivity, skills and technological progress. Due to the high uncertainty, the Fed will choose to move within the "moderately limited" range to remain resilient. For investors and companies, the key is to decode the words and data used by the Federal Reserve. The short-term market may fluctuate with an employment report, but understanding Ball's core thinking – risk management as the axis and data calibration direction – is the least likely north arrow to yaw through this uncertain road. In the post-pandemic era, tariff disputes and the triple pressure of an election year hit at the same time, the Federal Reserve led by Powell chose to "take the middle line and stay behind". In the coming months, global funding will continue to parse every press conference and every piece of data. There is no risk-free path, but the market is still expecting a clear footprint to follow. The Fed's Beige Book shows moderate economic growth, but not fast; The Beige Book did not show significant regional differences; Risks to employment and inflation require different responses, and the Fed must weigh the pros and cons. By the next meeting, the labor market, economic growth data and inflation data will be looked at to judge whether policy is in the right place. 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